Market News

USDA slashes corn, soybean production estimates

USDA’s lowered its 2012 production outlook for corn and soybeans.

In the monthly supply and demand update, because of weather, USDA now sees corn at 12.970 billion bushels, well below the initial projection of 14.790 billion. The average yield estimate is 146.0 bushels per acre, a full 20 bushels less than originally expected. Ahead of the report, the average estimate, via Dow Jones Newswires, was 154.1 bushels per acre with a range of 147.1 to 160.2 bushels per acre, and the 2011 yield of 147.2 bushels per acre.

Planted acreage, based on the prospective planting estimate, is 96.4 million acres, and harvested area is seen at 88.9 million, down 200,000 from June’s guess.

Also in the supply and demand tables, USDA raised old crop ending stocks but slashed the new crop projection. With that lower production estimate, USDA increased the import guess while cutting all demand categories including feed, export, and ethanol use.

The average corn price for the current marketing year is estimated at $6.10 to $6.30 per bushel and new crop is projected at $5.40 to $6.40, up sharply from June’s estimate of $4.20 to $5.

Soybeans are now estimated at 3.050 billion bushels, compared to the last estimate of 3.205 billion. The average yield is projected at 40.5 bushels per acre, down 3.4 from the most recent guess. Pre-report expectations ranged from 41.3 to 43.9 bushels per acre, for an average of 42.3, and the 2011 average was 41.5 bushels per acre.

Based on the prospective planting report, planted area is 76.1 million acres and harvested acreage is seen at 75.3 million, up 2.3 million from the June estimate.

Old crop ending stocks matched the pre-report expectation and new crop was a little smaller than expected on that lower production guess and USDA did lower the crush, export, and implied biodiesel use estimates.

For soybeans, the average old crop price is estimated at $12.40 per bushel, while new crop is now seen at $13 to $15, up $1 on each end from June.